SOURCE: Community Bank of Orange, NA

October 13, 2008 11:09 ET

Community Bank of Orange Completes Recapitalization Transaction

Receives $23.4 Million in New Capital

MIDDLETOWN, NY--(Marketwire - October 13, 2008) - Community Bank of Orange (PINKSHEETS: CBOG) (the "Bank") announced today that it has completed the previously announced Recapitalization transaction (the "Agreement") with an investment group led by Kenneth J. Torsoe (the "Group"). Pursuant to the Agreement, the Bank raised $23.4 million in new capital, which will allow the Bank to continue its strategy of growth in Orange County and expansion of the Bank's footprint into Rockland and Westchester Counties.

Under the terms of the Agreement the Group purchased $23.4 million of newly issued common stock and $0.4 million in shares tendered by existing shareholders. As a result, the Group owns approximately 80 percent of the Bank's outstanding common stock. The Agreement called for the Group to make a tender offer for any and all of the Bank's common stock at a price of $3.50 per share and for the Bank to issue new common stock to the Group at a price of $3.00 per share. The Bank's shareholders had the option to either tender their shares for the $3.50 price or remain as shareholders of the newly recapitalized bank. The tender offer was completed on October 7 with 109,175 shares representing approximately 5% of the outstanding shares being tendered by stockholders.

"With 95% of our stockholders choosing to keep their stock, the tender offer results reaffirm the need in the present economic environment for a local customer oriented community bank and shows the stockholders' confidence that we will be that bank," stated Kenneth J. Torsoe. "With the capital we have raised, we believe we can provide the products, services and personalized service that consumers and businesses so desperately need."

Following the completion of the transaction, Kenneth Torsoe, a noted Hudson Valley builder and bank investor, has been elected Chairman of the Board of Directors and Edward Lutz, Kevin Plunkett and Daniel Rifkin have joined the Board. Messrs. Torsoe, Lutz and Plunkett all formerly served on the Board of Union State Bank and its holding company USB Holding Co., Inc. Mr. Rifkin is an established Rockland County certified public accountant, businessman and real estate investor. Existing Board members Anthony Ingrassia, Steven Bakst, Raymond Pantel, and Sheila Fishman will remain.

"As a result of this transaction, we have strengthened the leadership team, established a stronger capital structure, and put the Bank in a great position to attract new customers and employees, and deliver long-term value to our shareholders," said Eric J. Wiggins, the Bank's president and chief executive officer. "Our customers can now feel secure in the fact that they are dealing with an institution with the strength and capital to help them in the present financial environment."

The Bank, founded in 2002, is headquartered in Middletown, New York and maintains an additional branch in Warwick, New York. It is the first community bank chartered in Orange County, New York in over fifty years. It offers to its individual and business customers a variety of banking services and products, including free checking and expanded banking hours. The Bank is chartered by the OCC and its deposits are insured by the Federal Deposit Insurance Corporation. The Banks common stock is quoted on the Pink Sheets trading under the symbol "CBOG." Further information on Community Bank of Orange can be found by logging on to www.cbobank.net.

Contact Information

  • CONTACT:
    Eric Wiggins
    President and C.E.O.
    Community Bank of Orange
    845-695-7400